Celsius Sues Prime Trust Over $17M in Crypto

  • The crypto lender claimed Prime Trust returned $119 million in crypto when the two broke their relationship in 2021, but still held over $17 million in tokens.
  • Celsius’ legal team noted that the 398 BTC, 3,740 ETH, 2,261,448 USDC, and 186,268 CEL should have been returned immediately after Celsius filed for bankruptcy.
In spotlight, Alex Mashinsky, founder and CEO of Celsius

Alex Mashinsky, founder and CEO of Celsius, speaking at CoinDesk’s Consensus conference, September, 2019. CoinDesk

Troubled crypto lender Celsius filed a lawsuit against Prime Trust on 23 August, claiming the crypto custodian had failed to return more than $17 million worth of cryptocurrency.

According to documents filed with the U.S. Bankruptcy Court, Celsius claims that Prime Trust is yet to return over $17 million in crypto assets, which remained on its custody platform after the two companies terminated their relationship in June 2021. The complaint clarified that Prime Trust acted as a crypto custodian for Celsius’ New York and Washington-based customers, and that while it did return $119 million in crypto after the break up, it still held some tokens. The complain reads:

“In June 2021, Prime Trust purported to terminate its relationship with Celsius and indicated its desire to return the crypto assets it was holding to Celsius. Prime Trust complied in part, transferring crypto assets worth approximately $119 million (at recent prices) to Celsius. But Prime Trust has failed and refused to transfer to Celsius approximately $17 million worth of crypto assets (at recent prices) that Celsius instructed Prime Trust to deliver.”

Celsius has claimed that the crypto custodian still owes it 398 Bitcoin (BTC), 3,740 Ether (ETH), 2,261,448 USDC, and 196,268 Celsius (CEL), which at current prices are worth $17.1 million. Celsius’ legal team noted that Prime Trust should have delivered “all property belonging to Celsius” when the company filed for bankruptcy, and requested that it is ordered to do so under “section 542 of the Bankruptcy Code”.

The troubles for Celsius users began on 13 June, when the company paused all withdrawals on the platform citing “extreme market conditions”. A month later — after repaying its debts to decentralized finance (DeFi) platforms Compound, Aave, and Maker — Celsius filed for Chapter 11 bankruptcy protection, with recent documents suggesting its debt is close to $2.8 billion.

Related Coverage
FTX, Alameda Wallets Move $13M to Exchanges
  • A little over $13 million in altcoins were sent to crypto exchanges Binance and Coinbase in the past 24 hours, which is in accordance with a September court order.
  • The court ordered a phased liquidation process, which allows the bankruptcy estate to sell $3.4 billion worth of digital assets over a certain period of time.
November 1, 2023, 2:27 PM


Celsius Seeks Court Approval on Restructuring Plan
  • The bankrupt crypto lender said that if its reorganization plan is approved, it is ready to start repaying its customers using $2 billion in BTC and ETH by the end of the year.
  • If given the green light, Celsius will restart its business under the “NewCo” brand without any funded debt, and with seed funding of up to $450 million.
DoJ Requests SBF’s Expert Witnesses be Barred From Testifying
  • The U.S. Department of Justice has expressed its concerns over Sam Bankman-Fried’s seven expert witnesses, and requested they be barred from testifying on the case.
  • The DoJ claimed most of the proposed experts lacked the necessary foundation for their opinions, making them unqualified to be an expert witness.